Entry Draft Signing Bonuses

[Dan Wood]

I would like to propose a change in the way we do the entry draft. In the MLB when a player is drafted, the team and the agent come to an agreement over a signing bonus. This generally comes from different funds, than the teams roster budget. Since, we only have one budget, and not several, I think we should forgo the signing bonuses. For instance and small market team, that has to sign an early round pick, automatically has to give up a decent size some of their budget to sign this unknown factor.

Without signing bonuses, it'll make it easier for all teams to compete, and it makes draft picks very valuable to rebuilding teams. I think once the player is drafted is is automatically put on your roster. If we did have separate budgets for drafts/ prospects and for our rosters then I would be all for that, but that starts to make things complicated and this league is complicated enough as it is. So that is my thought. You get a pick, you draft a guy, he does not get a signing bonus. It puts too much of a financial hindrance on running a club to pay draft picks a lot of money since we are using a salary cap for any and all financial moves.  Thoughts?

[Canada8999]

Draft eligible players will have signing bonuses assigned before the draft (based on pre-draft published rankings and historical bonuses), so a small market team could essentially draft all low bonus 'sign-ability' players, as they sometimes do in real life.

[Colby]

Draft eligible players will have signing bonuses assigned before the draft (based on pre-draft published rankings and historical bonuses), so a small market team could essentially draft all low bonus 'sign-ability' players, as they sometimes do in real life.

Dan is suggesting that such bonuses don't count against the cap.  I can surely see his point, but these players usually go on the 40-man roster and count at MLB payroll in real life.

[rcankosy]

I agree that draft picks should NOT have signing bonuses tied to them. 

[Canada8999]

I guess my response to that would be why do you believe they should not be included?  If the intention of this league is to closely mimic a real MLB environment, where signing bonuses and sign-ability are a huge part of the draft, then personally I don't think eliminating them as a positive change.  If we have issues resulting from the cost of prospects being too high, then I would suggest we look at increasing cap space rather than removing bonuses... in MLB the money is paid and it comes from somewhere.

[rcankosy]

In real life, the bonuses paid to draft picks and international signings does NOT count against the salary cap unless they are signed to a major league contract like Andrew Brackman.  By the way, that happens extremely rarely.

[Canada8999]

In real life, the bonuses paid to draft picks and international signings does NOT count against the salary cap unless they are signed to a major league contract like Andrew Brackman.  By the way, that happens extremely rarely.

There is no hard-cap in real life - we use a cap to simulate a budget, and in real life bonuses are paid with real money, from the team's bottom line.

[rcankosy]

There is a salary limit for luxury tax purposes although it is not a hard cap.  That was the "cap" to which I was referring, and bonuses paid to draft picks and international players do not count against it.

[Canada8999]

Ok - to be sure we're all on the same page regarding the various sides to the discussion, this is my current understanding.  Please add notes wherever I've missed something.

Problem: Within our current salary cap budgets, many teams will not have sufficient cap space to both field a competitive team and pay bonuses for Entry Draft Picks.

And the proposed solutions:

A)  Do not include signing bonuses for drafted players
B)  Offer teams an additional pool of money to use only on signing bonuses
C)  Increase the overall cap room for teams
D)  Do nothing

Here are the current requirements for Entry Draft signing bonuses:

Entry Draft Contracts
These are bonuses to be paid in the entry draft per a pre-ranking list provided by Baseball Prospectus before the real-life MLB draft.  These bonuses are not based on actual draft position.

1 - 7.0M
2 - 6.0M
3 - 5.0M
4 - 4.0M
5 and 6 - 3.5M
7 and 8 - 3.0M
9 thru 12 - 2.5M
13 thru 17 - 2.0M
18 thru 31 - 1.5M
32 thru 46 - 1.0M
47 thru 64 - 0.5M
all picks from 65 on require no signing bonus

• Signing bonuses paid to drafted player count against the teams salary cap - after required signing bonuses are paid, players on the EDR are kept at no cost.  Players may be dropped from the EDR at any time, at no cost, to make room for newly drafted players (signing bonuses are not reimbursed).  Players released from the EDR are subject to standard free agency rules.

[Canada8999]

Personally, I think most teams should have enough flexibility to sign all of their draftees and spend less than $3.0-4.0M.  Others can spend a few million more, and cap strapped teams can spend $1.0M or less. 

For example, lets look at the Rangers.  If you were to draft exactly by slot (although you certainly would have the flexibility to vary from that if you chose), your required bonuses would be:

1-12 TEX --> 9 thru 12 - 2.5M
2-12 TEX --> 32 thru 46 - 1.0M
(no other picks require a bonus)

Total: $3.5M, which is less than the current available cap space of $18.0M.

I don't see this as a significant amount of money to spend, and since the current rules have been in place since early in the off-season, teams should be preparing accordingly.